AC 320 Ch. 3-Accounting Information Systems Case Introduction: You will compiete an entire accounting cycle for a retail company using both paper records and Excel spreadsheets. Just a word of caution, be sure to complete the assignment on your own It is okay to discuss with athers in the class; just make sure vou are the one actually completing your case inciding the Excel spreadsheets Too often instructors discover copying because students peroeive it is easy to do in Excel; hawever, there are ways of detecting that. So please be conscientious and do your own work. The Bell Wholesale Company began operations on August 1, 2015. The following transactions took place during the month of August. a. Owners invested $45,000 cash in the corporation in exchange for 5,000 shares of b. Equipment is purchased for $20,000 cash. d. Merchandise inventory costing $38,000 is purchased on account. The company uses the e 30,000 is borrawed from a local bank, and a nate payable is signed e $15,000 is collected on account from customers. common stock. On the first day of August, $6,000 rent on a building is paid for the months of August and September perpetual inventory system. Credit sales for the month are $40,000. The cost of merchandise sold is $22,000. h. $20,000 is paid on account to suppliers of merchandise. Salaries of $7,000 are paid to employees for August A bill for $2,000 is recelved from the local utility company for the month of August $20,000 cash was loaned A customer prepaid $3,000 case for merchandise to be delivered in September, k. to another company, evidenced by a note receivable October, and November. m. The corporation paid Its shareholders a cash dividend of $1,000 Required (Note: journal and ledger paper are provided on subsequent pages. An Excel template for requirement #3 is filed in DocSharine Students are to create from scratch an Excel spreadsheet for the preparation of financial statements as directed in requirement N4.) Work through the case as directed so that your experience the sequence of the accounting cycle. 1 Prepare a journal entry for each transaction. 2 Post to general ledger accounts. An Excel version of a working trial balance is posted in DocSharing. Complete the Unadjusted Trial Balance on the Excel spreadsheet. The debit and credit columns should totall $138,000. 3. Complete a month-end working trial balance on an Excel spreadsheet as of August 31, 2015. (See Farel template in AC320 DesSharing falder.J The working trial balance enables the accountant to problem-solve for the adjustments and complete the finsncial statements before formally recording adjustine entries into the accounting records. You will formally record the adjusting entries in requirement 6. Solve for Bell's adjusting entries using the following information, then complete your spreadsheet through the adjusted trial balance columns a. The comparry anticipates that of the $25,000 in Accounts Receivable from customers, $2,500 will not be collected b. The nate payable requires the entire $30,000 in principal plus interest at 10% to be paid on July 31, 2016. The date of the loan is August 1, 2015. c. The equipment that was purchased on August 1, 2015 is beling depreciated using the straight-line method over 3 years and is expected to have a $2,000 residual value. Recall only one month is depreciated.) The note receivable is dated August 16, 2015. The note requires the entire $20,000 in principal plus interest at 12% to be repaid in four months (Note that the loan was outstanding for one-half month in August. The prepaid rent of $6,000 represents rent for the months of August and d. e. f. Assume that August 31 is the company's fiscal year-end. Prepare the necessary closing entries and a post-closing trial balance on your Excel Total debits and credits for the Adjusted Trial Balance columns should be $141,350. g- 4, using Sheet 2 &/or 3 (from your Excel spreadsheet in #3), prepare the company's financial statements for August 2015 on an Excel Spreadsheet You are responsible for creating and formatting Go back to your working trial balance and problem-solve for your closing entries. Complete the working trial balance through the post-closing trial balance. Total debits and credits for the Post-Closing Trial Balance columns should be $103,100. 5. 6 Formally record both the adjusting and dosing entries in the general journal Past to the general ledger accounts. Double check that your eneral ledger account balances agree with your post-closing trial balance